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1. 11
Venture Capital 101
Training created by
Ex-Deloitte and
McKinsey Consultants
and JP Morgan
Investment Bankers

2. 22
What is a Venture Capital Firm?
Sources of
capital
Venture Capital Firm
managing the Fund
Startups and small
businesses
• Venture capital firms mostly invest in start-ups and small businesses
with high growth potential
Pension Funds
Corporations
High net worth
individuals
$$$
$$$
$$$
Venture Capitalist
Venture Capitalist
Venture Capitalist
Entrepreneurs
Startups
Small Businesses
$$$
$$$
$$$

3. 33
What are the 3 key differences between Venture Capital
and Private Equity?
Start-ups and small
businesses
Types of
companies
they invest in
1
<$10 millions in multiple
startups
Amount of
money they
invest
2
50% or less
Percentage of
ownership in
the company
they invest in
3
Venture Capital Firms Private Equity Firms
Mature companies
>$100 millions in a single
company
100%
• Even if both Venture Capital firms and Private Equity firms invest in
privately held company, there are usually 3 key differences

4. 44
How does the Venture Capital (VC) industry look like?
• The venture capital industry is a major shaker, funding companies
developing technological and service innovations long before they
become mainstream
• Venture-backed firms are better performer than non Venture-
backed firms *
• 400+ VC firms in the US
• 5-10 year investment horizon
• Co-investment with other VCs common
*Source: National venture capital association

5. 5
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6. 66
What is the growth of a successful start-up?
Revenue
Time
Early Stage Later StageSeed Capital Exit Market
FFF & Angels IPO Wallstreet
VC
(M&A, Strategic Alliances)

7. 77
When are the usual funding rounds?
Revenue
Time
Early Stage Later StageSeed Capital Exit Market
FFF & Angels IPO Wallstreet
VC
(M&A, Strategic Alliances)
A
B
C
Seed

8. 88
What does Seed Funding mean?
Revenue
Time
Early Stage Later StageSeed Capital Exit Market
FFF & Angels IPO Wallstreet
VC
(M&A, Strategic Alliances)
Seed capital helps to transform a seed (or
business idea) into a tree (or mature operating
business). The capital raised is roughly around
$500,000 to 2 million, usually to define more in
details their product and customers and carry
out an initial market research. The key players
in this round are usually angel investors and
early stage venture capital firms which are not
afraid of taking higher risk.
Seed

9. 99
What does Series A Funding mean?
Revenue
Time
Early Stage Later StageSeed Capital Exit Market
FFF & Angels IPO Wallstreet
VC
(M&A, Strategic Alliances)
A
Series A funding is useful in optimizing
product and user base. In this round, it’s
important to define a profitable business
model. Typically, Series A rounds raise
approximately 2 million to 15 million. The
investors involved in the Series A round
come from more traditional venture
capital firms such as for example
Benchmark and Greylock.

10. 1010
What does Series B Funding mean?
Revenue
Time
Early Stage Later StageSeed Capital Exit Market
FFF & Angels IPO Wallstreet
VC
(M&A, Strategic Alliances)
Series B rounds are all about taking
businesses to the next level, past the
development stage. Estimated capital
raised hovers around $7 to 10 million and
is partly allocated to grow the team and
expand market reach.
B

11. 11
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12. 1212
What does Series C Funding mean?
Revenue
Time
Early Stage Later StageSeed Capital Exit Market
FFF & Angels IPO Wallstreet
VC
(M&A, Strategic Alliances)
In Series C rounds, investors
inject capital into already
successful businesses. This
final round is about perfecting
and continuing to scale.
Companies may raise five
million to hundreds of millions.
As the investment gets less
risky, more investors come to
play such as hedge funds,
investment banks, private
equity firms and big
secondary market groups.
C

13. 1313
What is the usual Venture Capital structure?
Limited Partners or investors
Public pension funds, Corporate pension funds,
Insurance companies, High net worth individuals,
Foundations, Fund-of-funds, sovereign wealth funds,
etc
Venture Capital Firm
General Partner
Venture Capital Fund
Limited Partnership
Investment Investment Investment
Ownership of the fundOwnership + Management of the fund
The fund’s ownership of the portfolio investments

14. 1414
What is the Venture Capital process?
Fund
raising
Target
screening
Due
Diligence
Deal Exit
Investment
Strategy
$

15. 1515
What is the Venture Capital process?
Fund raising
Target
screening
Due Diligence Deal Exit
Investment
Strategy
$
• Identify the industries and markets you want to focus on, making sure you diversify your risks:
Industry A (X%), Industry B (X%) and Industry C (X%)
• Define the stage you want to focus on: Seed (X%), Series A (X%), Series B (X%), Series C+ (X%)
• Identify your investment size for each stage: Seed: $250K-$500K, Series A: $500K-$1M (2x Seed),
Series B: $1M-$2M (2x Series A), Series C: $3M-$6M (3x Series B)
• Define potential strategic partnership with other VC firms or Business Angels
• Create your team, combining complementary skills: successful Entrepreneurs, Investment Bankers,
Management Consultants
• Identify the minimum revenue or EBITDA the target companies you want to invest in should have
• Anticipate your target ownership range: 10%-40%
• Define your Target return objective: 5x-10x+
• Agree on your exposure: no more than 10% of fund in any one company
• Identify what added value you can bring, besides the capital
Key Activities (with examples)

16. 1616
What is the Venture Capital process?
Fund raising
Target
screening
Due Diligence Deal Exit
Investment
Strategy
$
• Identify the key contacts you could leverage within and outside your network:
• Fund of funds
• Foundations
• High net worth individuals
• Prepare a comprehensive pitch in order to convince the potential investors that the partners
within your firm:
• Have a big pool of startups investment to choose from
• Have a good and sustainable relationship between them
• Are able to identify the right start-ups to invest in
• Will bring some diversity within the investor portfolio
• Be ready to hear the answer “No”
Key Activities

17. 17
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